A state judge has ruled that the administration of Gov. Mike Dunleavy has “violated their duty to faithfully execute the law” by failing to follow an advance-funding plan for state schools.
The decision is a significant victory for the Alaska Legislature, which sued the governor to enforce the 2018 law that set school funding amounts one year in advance. Dunleavy had sought to cut public school funding for the 2019-20 school year but was opposed by the Legislature, which insisted he follow the law passed before Dunleavy became governor. Though Dunleavy subsequently backed away from his planned cuts, he continued to insist that the 2018 law was unconstitutional and could not be legally followed.
Both the administration and lawmakers signed a legal agreement to keep schools funded until a judge ruled on the dispute.
“Article III, Section 16 of the Alaska Constitution vests the governor with the responsibility ‘for the faithful execution of the laws.’ The defendants thus have a constitutional obligation to execute the appropriations,” Juneau Superior Court Judge Daniel Schally wrote in his decision, dated Thursday.
The decision will be appealed to the Alaska Supreme Court, Attorney General Kevin Clarkson said in a written statement.
“This issue is too important not to appeal and get final guidance from the Alaska Supreme Court, so we all know going forward what the rules are,” Clarkson said.
His statement added that the state will seek to avoid any effect on school funding while the appeal progresses.
The legal dispute was principally about whether or not the Alaska Legislature may decree a spending plan multiple years in advance. The 2018 law was intended to fix budget instability caused when the Alaska Legislature takes longer than expected to work on the state budget. In those cases, school districts must set their budgets before lawmakers determine how much money those districts have to spend.
As a result of that instability, schools have laid off hundreds of teachers as a precaution, only to re-hire them once funding is assured. That cycle has discouraged teachers from remaining in Alaska, and the Legislature sought to fix the problem in 2018 by setting the budget for both the 2018-19 school year and the 2019-20 school year.
“The Legislature’s chosen solution to the actual or perceived problem in public education is rational,” Schally wrote.
Alaska’s constitution prohibits the Legislature from dedicating a particular tax to a particular program, and the Alaska Department of Law contended that this “dedicated funds clause” made the Legislature’s action illegal. Schally, citing prior rulings by the Alaska Supreme Court, said otherwise. The Legislature wasn’t creating a dedicated fund, he said, it was scheduling a draw from the state’s general fund, which collects all tax revenue.
“The appropriations do not earmark a particular public revenue source ... but instead appropriate treasury revenue after it is deposited in the general fund. Therefore, the appropriations at issue do not directly violate the dedicated funds clause,” he wrote.
The Department of Law had also argued that the constitution prohibits the Legislature from setting spending in advance, that one year’s budget can only be written and enacted that year.
That isn’t in the constitution, Schally wrote, “and the court is absolutely restricted from reading into the constitution absent or missing language.”
In his written statement, Clarkson said the ruling means the Alaska Legislature could set funding amounts years in advance if it wishes.
Schally acknowledged that argument but said nothing prevents a sitting governor from vetoing such a plan, which could also be changed by future legislators. The ability of the Legislature to change spending plans on a year-by-year basis is a key test of whether or not something violates the constitutional prohibition on dedicated funds, Schally wrote.
“Simply put, the forward-funding appropriations here do not constrict the Legislature’s power over free disposition of state funds to such a degree that they exceed the Legislature’s freedom to experiment and adapt to the changing circumstances and hurdles of the day, particularly in the field of public education,” he wrote.